CHICAGO—As reported in GlobeSt.com last week, Ryan Companies US Inc. has completed two speculative industrial buildings, both in the suburban Elgin submarket, in the last 60 days. And John Dunneback, the company's director of development, tells GlobeSt.com that this corner of the Chicago metro area is well-positioned to see a significant amount of new construction. Ryan Companies, for example, is set to launch more projects in the immediate area once spring comes.
“Historically, this has been a pretty solid market,” he says. The growth typically does not come from big outsiders coming in to set up shop, but from the expansion of a group of smaller firms with deep attachments to the local area. Unlike the denser I-55 or I-290 submarkets, from which trucks can reach Chicago in as little as 20 minutes, Elgin and its environs serves “a unique set of users that wish to focus on the northwest corner of the suburbs. I wouldn't say it's isolated, but it is more of a destination submarket.”
Ryan's most recently completed building is a 108,000-square-foot building at 2725 Alft Ln. in the company's Randall Crossings Business Park. This follows the completion of a 225,000-square-foot building in the same park at 2750 Alft Ln. These buildings were for two different ownership groups and each “felt quite comfortable about taking the lease-up risk.” The smaller building was leased up before it was finished and the larger is already about half-leased. The two buildings that Dunneback anticipates beginning construction on next year will have 85,000-square-feet and 246,000-square-feet next year.
“These are all built for multitenant users,” he adds, primarily for those that need between 35,000-square-feet and 50,000-square-feet. The top prospects to fill up these spaces include manufacturers of retail goods that need to be warehoused and distributed to local retailers such as Best Buy and Target.
Ryan is not the only company breaking ground in the area. “Construction activity continued to flourish in the Elgin I-90 Corridor in the third quarter,” notes Colliers. “Weber-Stephen Products Company hired Duke Realty Corporation who commenced construction on a 757,100-square-foot bulk warehouse/distribution facility at Huntley Business Park. The build-to-suit for lease facility is scheduled for completion during the first quarter of 2015.”
But even with all the new construction getting launched in the area, Dunneback does not expect a return to the go-go attitude that prevailed before the recession. Back then, banks were far more willing to lend, and developers were buying up to 200 acres of land at a time. “Now the mindset is to purchase just the amount of land that you can develop in three years. We're now very cautious about the amount of dirt we buy.”
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
